Finance ministry takes Port Qasim Authority to task on LNG terminal delay

KARACHI: Ministry of finance has dismayed over the delay in the development of third liquefied natural gas (LNG) terminal and held the Port Qasim Authority (PQA) responsible for the holdup, sources said Monday.

The sources said a meeting of the Cabinet Committee on Energy (CCoE) was held last week. The meeting pointed out lethargy on the part of PQA, as the authority did not provide a presentation/summary for setting up an additional LNG terminal at the Port Qasim.

Last month, the ministry of maritime affairs advised PQA to provide a detailed presentation pertaining to the third LNG terminal. PQA, however, did not provide the required details despite lapse of a considerable time. The authority could not be contacted for comments.

The government planned to construct new LNG terminal in the main channel at the port to meet the rising demand of natural gas, which would further increase in the summer.

The country currently has two terminals with re-gasification capacity of 1.2 billion cubic feet/day. Pakistan relies on natural gas to meet almost 50 percent of its energy needs. Its gas reserves have dwindled in the recent years, as consumption has outweighed new discoveries.

The country is projected to face gas deficit of up to 3.9 billion cubic feet per day (bcfd) by fiscal year of 2019-20 and the gap would further widen up to 6.6 bcfd without the imported gas by 2029/30.

More than 0.3 million consumers were added or connected to the gas network, annually by the gas companies, during the last five years. The positive growth of sectors, such as power, commercial, residential and fertiliser has resulted in natural gas availability constraint. Demand for natural gas will further increase in the coming years.

Industrial users as well as compressed natural gas station owners protest against supply cuts while trade bodies demand of the government for uninterrupted gas supply as per the provisions of the constitution.

The Economic Coordination Committee of the cabinet earlier directed the ministry to carry out a feasibility study in consultation with the petroleum division to assess the requirement for setting up new LNG terminals in the country and also to carry out a cost-benefit analysis/study for shifting of existing LNG terminals to suitable places.

The maritime ministry and PQA expressed their concerns on the existing terminals. They said presence of the two LNG terminals causes serious security threats to the port. Pakistan imported $2.188 billion worth of LNG in first eight months of the current fiscal year, which is 57.8 percent higher than the imports in the corresponding period of last year.

Six additional LNG import projects have been proposed by ExxonMobil, Shell, Trafigura, Total, Mitsubishi and Bahria Foundation. Most are planned at the Port Qasim. If only four of the new schemes come to fruition annual LNG deliveries could reach 30 million tons per annum by 2025.